KARACHI: Recent research has highlighted the massive gap between Pakistan’s potential to export and the value it actually achieves in the pharmaceutical sector, underscoring needs for reforms in an economy that desperately needs avenues to generate non-debt creating foreign exchange inflow.
All stakeholders believe Pakistan’s pharmaceutical industry is vital for its economy, and can contribute significantly to GDP and provide massive employment opportunities.
However, despite its potential, Pakistan’s pharmaceutical exports have been relatively modest compared to its neighbour India.
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India’s pharmaceutical exports are set to reach $28 billion in fiscal 2023-24, according to the Pharmaceutical Export Promotion Council (Pharmexcil), while Pakistan reached a record high of $713 million in pharmaceutical exports during 2022-23.
While this is an achievement, there is ample room for growth and improvement in Pakistan’s pharmaceutical export strategy, say experts.
A senior official from the pharmaceutical industry, speaking to Business Recorder, emphasised that India’s success is not based on complex strategies.
India’s pharmaceutical industry has pursued a strategic direction that has propelled its exports and established it as a powerhouse in the sector.
“India largely followed the path that the pharmaceutical industry in Pakistan was on in the 1950s and 60s, before nationalisation,” the official said.
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“India only adopted this direction in the 1990s under Manmohan Singh. Moreover, India’s policies have continued to evolve,” said the official, requesting anonymity.
One of the key factors contributing to India’s success in pharmaceutical exports is its focus on international collaborations for regulatory harmonization and capacity building. For instance, India has signed Memorandums of Understanding (MOUs) with countries like Korea and collaborated with industry associations to access new markets and enhance its export capabilities.
These partnerships have helped India streamline its export procedures and navigate complex regulatory environments, giving it a competitive edge in the global market.
In contrast, Pakistan lacks such international agreements and collaborations, limiting its market access and export potential. Pakistan also faces challenges such as the lack of an e-visa facility for foreign regulatory inspectors, which hinders the ease of doing business and trade agreements with other countries.
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To enhance its pharmaceutical exports, Pakistan should consider adopting several strategic measures, urge experts. Firstly, a dedicated division agency - Pharmaceutical Council – needs to be established to focus solely on promoting exports could be beneficial. This agency could work closely with stakeholders such as the Drug Regulatory Authority of Pakistan (DRAP) and the Ministry of Commerce to streamline export procedures, provide incentives for export-oriented companies, and identify key export markets.
Moreover, Pakistan should develop a comprehensive market strategy that focuses on key markets with high growth potential such as Africa. Africa’s pharmaceutical market is projected to be worth between $56 billion to $70 billion by 2030, offering significant opportunities for growth. By targeting these markets and understanding their specific regulatory requirements, Pakistan can capitalise on this growth potential and expand its export footprint.
Additionally, resolving issues related to nutraceutical exports could further enhance Pakistan’s export potential. Nutraceuticals have the potential to reach approximately $10 billion in exports to developed countries. However, Pakistan must align its regulations with international practices to facilitate exports and access global markets.
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By adopting export-oriented policies, providing incentives for research and development, and negotiating trade agreements, Pakistan can boost its pharmaceutical exports and position itself as a leading exporter in the region.
Collaborating with countries like Afghanistan, the Philippines, and African nations could further enhance Pakistan’s export potential, contributing to economic growth and development.
The experts concluded that Pakistan has the potential to significantly increase its pharmaceutical exports by learning from India’s success and adopting strategic measures to enhance its export capabilities.
Copyright Business Recorder, 2024